Summary Judgment In Favor Of Broker In Malpractice Case Reversed, Where Special Relationship With Insured May Have Existed


In a case involving alleged broker malpractice with respect to certain underinsured business interruption losses under a commercial property insurance policy, the New York high court reversed a lower appellate court’s affirmance of summary judgment in favor of the insurance broker. The court found that the evidence suggested that “there was some interaction regarding a question of business interruption coverage, with the insured relying on the expertise of the agent,” where the insured testified that (1) she and the broker discussed the coverage, (2) the broker requested sales figures and other data, (3) the broker assured the insured that the coverage was adequate, and (4) the broker repeatedly pledged to review coverage annually and recommend adjustments as the insured’s businesses grew. The court also reversed the intermediate court’s majority view that the insured’s knowledge of the coverage limits warranted dismissal. The court explained that, where a special relationship existed, “it is wholly irrelevant whether [the insured was] aware of the limits that were actually procured.” Voss v. Netherlands Insurance Co., Case No. 11 (N.Y. Ct. App. Feb. 25, 2014).

Topics:  Brokers, Business Interruption, Special Relationship, Summary Judgment

Published In: Civil Procedure Updates, General Business Updates, Insurance Updates, Professional Malpractice Updates, Commercial Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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